Property Tax Transparency For All Non-Profits, Not Just Some
In the coming months, you will begin hearing more about a proposal in the legislature that will allow counties in Idaho to evaluate property tax exemptions for non-profit hospitals under the same rules as other non-profits. Some of the criticisms you are already hearing are misleading. It is important, especially if you pay property taxes, to understand the facts.
We as a society believe legally defined charity care is a community benefit and should be rewarded. In Idaho and most other states 501(C)(3)s including Terry Reilly Health Services, Women’s & Children’s Alliance (WCA), Boise Rescue Mission, Humane Society, and the Idaho Food Bank, to name a few, are not required to pay taxes on properties with facilities that provide a direct community benefit. In 1999, Idaho hospitals lobbied the legislature to change the law and now receive a special property tax exemption unavailable to other non-profits.
Last fall the Idaho Association of Counties (IAC) unanimously agreed to support a measure that would put back into place some reasonable guardrails involving non-profit hospitals. The proposal does not question a non-profit hospital’s tax-exempt status. It does not ignore the critically important work done by healthcare workers who save lives and improve lives in our communities each day. Non-profit hospitals would still be exempt from paying property taxes now and in the future using the same criteria as other non-profits, but they would once again be required to be transparent with taxpayers in the communities they serve.
The IAC resolution would return the reasonable checks and balances in place prior to 1999 when nonprofit hospitals changed the rules, so they have different reporting requirements. We do not understand why some non-profit hospitals are so adamantly opposed to simply being transparent with the community in exchange for being property tax exempt.
We believe emergency rooms and hospitals in our communities should remain tax exempt. We do not believe tax exempt status should stretch to include offices and parking garages. Most importantly, we believe all non-profits should be treated equally or, in the case of non-profit hospitals, explain to taxpayers why they alone should not be transparent.
As with all realms of taxation, transparency and oversight are the key ingredients to ensuring the system is fair. Transparency allows governing bodies like counties to review financial statements and confirm that facilities are eligible for property exempt status each year. By doing so we ensure that individual property owners are not picking up the tab for properties that do not qualify for tax-exempt status under the law.
If it is determined that a non-profit hospital should in fact be paying taxes on a particular parcel what happens to the money? Does that go into the county general fund? No, that money would offset your property taxes. However, there’s no way to know if hospitals are paying their fair share because they do not provide counties with information that can be checked or challenged.
The IAC proposal would require Idaho non-profit hospitals have the same transparency rules that all other 501(C)(3) organizations have. Why is this wrong?
Ada County Commissioners
Chairman Rod Beck, Ryan Davidson, and Tom Dayley